Old Line Bancshares, Inc. Reports Net Income of $8.5 Million, a 40% Increase, for the Quarter Ended March 31, 2019

143 Days ago

BOWIE, Md., April 24, 2019 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (“Old Line Bancshares” or the “Company”) (Nasdaq: OLBK), the parent company of Old Line Bank (the “Bank”), reports net income increased $2.4 million, or 40.21%, to $8.5 million for the three months ended March 31, 2019, compared to $6.1 million for the three month period ended March 31, 2018. Earnings were $0.50 per basic and diluted common share for the three months ended March 31, 2019, compared to $0.48 per basic and diluted common share for the three months ended March 31, 2018. The increase in net income for the first quarter of 2019 as compared to the same 2018 period is primarily the result of increases of $5.6 million in net interest income and $968 thousand in non-interest income, partially offset by a $3.3 million increase in non-interest expense.

Net interest income increased during the three months ended March 31, 2019 compared to the same period last year almost entirely as a result of an increase in interest income on loans, partially offset by an increase in interest expense. Non-interest income increased $968 thousand, or 53.91%, primarily as a result of income from our point of sale (“POS”) sponsorship program, which was not in place during the first quarter of 2018. Non-interest expense increased $3.3 million, or 29.63%, for the three month period ended March 31, 2019 compared to the three month period ended March 31, 2018. Non-interest expense increased due to increases in salaries and employee benefits, occupancy and equipment, core deposit amortization, data processing, and other operating expenses, primarily as a result of the additional staff and the new branches that we acquired upon our acquisition of Bay Bancorp, Inc. (“BYBK”), the former parent company of Bay Bank, FSB, in April 2018.

Net loans held for investment at March 31, 2019 increased $8.0 million, or 0.33%, compared to December 31, 2018 and $660.6 million, or 37.61%, compared to March 31, 2018. Total deposits at March 31, 2019 increased by $39.4 million since December 31, 2018 and $549.8 million or 30.8% compared to March 31, 2018, while total assets increased $127.2 million to $3.1 billion at March 31, 2019 from $2.9 billion at December 31, 2018 and $866.5 million or 39.2%, since March 31, 2018. The increase in loans since March 31, 2018 was a result of net organic growth of $270.5 million, or 18.9%, and $390.5 million in net growth in the acquired loans portfolio. The increase in loans since December 31, 2018 was a result of net organic growth of $36.8 million, or 8.8% annualized offset by $28.9 million in paydowns on previously acquired loans. The increase in deposits since March 31, 2018 includes $470.4 million associated with the branches acquired in the Bay Bank merger.

As of March 31, 2019, the Company had total assets of approximately $3.1 billion, net loans of approximately $2.4 billion and deposits of approximately $2.3 billion. Total assets include a $25.9 million operating lease right of use asset due to the adoption of the Accounting Standards Update (“ASU”) 2016-02 in the first quarter ending March 31, 2019. There is a corresponding operating lease liability recorded of $26.2 million upon adoption.

James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, stated: “I am pleased to report favorable earnings for the first quarter of 2019 and look forward to the remainder of the 2019 year. Our core deposits increased by $39.4 million during the quarter, including $20.9 million in non-interest bearing deposits, as we continue to build relationships while providing superior service. We believe with our existing branches, our lending staff, our corporate infrastructure, solid balance sheet, and strong capital position, we can continue to focus our effects on improving earnings per share and enhancing stockholder value.”

1st QUARTER HIGHLIGHTS:

Average gross loans increased $697.5 million, or 40.54% to $2.4 billion during the three month period ended March 31, 2019, from $1.7 billion during the three months ended March 31, 2018. The increase in average loans as compared to March 2018 is due to significant organic growth in addition to the acquisition of BYBK. Average gross loans increased $3.5 million, or 0.15%, during the three month period ended March 31, 2019, remaining steady at $2.4 billion during the three month period from December 31, 2018.

Total yield on interest earning assets increased to 4.74% for the three months ended March 31, 2019, compared to 4.52% for the same period of 2018.

Return on average assets (“ROAA”) and return on average equity (“ROAE”) were 1.16% and 8.99%, respectively, compared to ROAA and ROAE of 1.16% and 11.36%, respectively, for the first quarter of 2018.

Total assets increased $127.2 million, or 4.31%, during the quarter, primarily due to an increase of $87.3 million in our investment securities available for sale and the addition of $25.9 million for an operating lease right of use asset.

Total deposits grew by $39.4 million, or 1.72%, during the quarter.

We ended the first quarter of 2019 with a book value of $22.29 per common share and a tangible book value of $15.88 per common share compared to $21.77 and $15.39, respectively, at December 31, 2018.

We increased our quarterly dividend by 20% to $0.12 per share during the quarter.

We maintained appropriate levels of liquidity and by all regulatory measures remained “well capitalized.”

Results of Operations for the Three Months Ended March 31, 2019 Compared to March 31, 2018

Average interest earning assets increased $730.2 million for the three month period ended March 31, 2019 compared to the same period of 2018. The average yield on such assets was 4.74% for the three months ended March 31, 2019 compared to 4.52% for the comparable 2018 period. The increase in the average balance of our interest earning assets is primarily due to organic growth and the loans we acquired in the BYBK acquisition. The increase in the average yield is primarily the result of higher yields on our investment securities available for sale and on our loans held for investment. Average interest bearing liabilities increased $572.5 million for the three month period ended March 31, 2019 compared to the same period of 2018, primarily as a result of the deposits we acquired in the BYBK acquisition. The average rate paid on such liabilities increased to 1.53% for the three month period ended March 31, 2019 compared to 1.03% for the same period in 2018 due primarily to higher rates paid on our money market accounts, certificates of deposit, and borrowings.

The net interest margin for the three months ended March 31, 2019 decreased to 3.59% from 3.76% in the three months ended March 31, 2018. The net interest margin decreased due to increased interest rates on both deposits and on our borrowed funds, partially offset by an increase in the yield on our interest-earning assets. The net interest margin during the first quarter of 2019 was positively affected by the amount of accretion on acquired loans. Accretion increased due to a higher amount of early payoffs on acquired loans with fair value marks during the three months ended March 31, 2019 compared to the same period of 2018. The fair value accretion/amortization is recorded on pay-downs recognized during the quarter, which contributed 15 basis points for the three months ended March 31, 2019 compared to seven basis points for the three months ended March 31, 2018.

Net interest income increased $5.6 million, or 31.83%, for the three months ended March 31, 2019 compared to the same period of 2018, almost entirely due to an increase in loan interest income resulting from increases in both the average balance of and yields on loans, partially offset by an increase in interest expense. Interest expense increased due to increases in both the average balance of and average interest rates on our deposits and borrowings.

The Board of Governors of the Federal Reserve System has increased the federal funds rate, the primary driver of our deposit and borrowing costs, from 1.5% at December 31, 2017 to 2.5% at March 31, 2019. The majority of our loans, however, are indexed to the 5 year treasury rate, which has actually decreased from 2.56% at March 31, 2018 to 2.23% at March 31, 2019, while the average 5 year treasury rate for the 12 month period ended March 31, 2019 only increased 17 basis points over the March 31, 2018 rate. As a result, we were not able to offset the increase in funding costs through increases in the interest rates on our loans. In spite of this, however, we were able to improve operating results quarter over quarter through asset growth and operating efficiencies.

Non-interest income increased $968 thousand, or 53.91%, for the three month period ended March 31, 2019 compared to the same period of 2018, primarily as a result of income of $600 thousand from our new POS sponsorship program. A $201 thousand increase in earnings on bank owned life insurance (“BOLI”), resulting from the $16.3 million of BOLI acquired in the BYBK acquisition, also contributed to the increase in non-interest income.

Non-interest expense increased $3.3 million, or 29.63%, for the three month period ended March 31, 2019 compared to the same period of 2018 as a result of increases in salaries and employee benefits, occupancy and equipment, core deposit amortization, data processing, and other operating expenses. Salaries and employee benefits increased $1.6 million primarily as a result of the additional staff, and occupancy and equipment expenses increased $472 thousand as a result of the new branches, that we acquired in the BYBK acquisition. Core deposit amortization increased $346 thousand as a result of the higher amortization of premiums resulting from the deposits we acquired in the BYBK acquisition. Data processing expenses increased primarily as a result of additional customer transactions primarily due to the additional branches, and therefore additional customers, resulting from our acquisition of BYBK. Other operating expenses increased $845 thousand due to increases in general operating costs, such as FDIC insurance, marketing and advertising, sponsorships and donations, loan expenses, software expense, and telephone expense.

Old Line Bancshares is the parent company of Old Line Bank, a Maryland chartered commercial bank headquartered in Bowie, Maryland, approximately 10 miles east of Andrews Air Force Base and 20 miles east of Washington, D.C. The Bank has 37 branches located in its primary market area of the suburban Maryland (Washington, D.C. suburbs, Southern Maryland and Baltimore suburbs) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Harford, Howard, Frederick, Montgomery, Prince George's and St. Mary's, and Baltimore City. It also targets customers throughout the greater Washington, D.C. and Baltimore metropolitan areas.

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. The Company’s management uses these non-GAAP financial measures, and believes that non-GAAP financial measures provide additional useful information that allows readers, to evaluate the ongoing performance of the Company and provide meaningful comparison to its peers. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.

Old Line Bancshares, Inc. & Subsidiaries

Consolidated Balance Sheets

March 31, 2019

December 31, 2018 (1)

September 30, 2018

June 30, 2018

March 31, 2018

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Cash and due from banks

$

49,619,806

$

41,495,763

$

45,774,719

$

61,684,888

$

85,617,226

Interest bearing accounts

2,107,845

2,051,273

3,522,685

3,845,419

2,687,988

Federal funds sold

961,329

953,582

1,008,801

928,337

200,366

Total cash and cash equivalents

52,688,980

44,500,618

50,306,205

66,458,644

88,505,580

Investment securities available for sale

307,034,351

219,705,762

216,358,059

209,941,534

210,353,788

Loans held for sale

9,632,523

11,564,993

8,829,777

34,037,532

3,934,086

Loans held for investment, less allowance for loan losses of $7,808,142

and $7,471,023 for March 31, 2019 and December 31, 2018

2,417,186,160

2,409,227,698

2,384,579,814

2,347,821,496

1,756,576,833

Equity securities at cost

13,863,550

11,150,750

13,063,250

14,854,746

7,782,847

Premises and equipment

42,561,705

42,624,787

43,060,727

43,719,013

40,991,968

Accrued interest receivable

8,607,100

7,958,511

8,072,826

7,715,123

5,310,151

Bank owned life insurance

68,333,419

67,920,021

67,490,846

67,062,920

41,849,569

Annuity plan

6,269,638

6,268,426

6,298,627

6,276,320

5,981,809

Other real estate owned

882,510

882,510

1,469,166

2,357,947

1,799,598

Goodwill

94,668,455

94,668,455

94,403,635

94,403,635

25,083,675

Core deposit intangible

14,704,408

15,362,232

16,024,950

16,688,635

5,985,657

Other assets

40,813,248

18,172,332

21,060,315

22,038,116

16,556,056

Total assets

$

3,077,246,047

$

2,950,007,095

$

2,931,018,197

$

2,933,375,661

$

2,210,711,617

Deposits

Non-interest bearing

$

579,962,005

$

559,059,672

$

581,339,177

$

603,257,708

$

572,119,981

Interest bearing

1,755,472,767

1,736,989,227

1,660,902,293

1,604,420,214

1,213,584,463

Total deposits

2,335,434,772

2,296,048,899

2,242,241,470

2,207,677,922

1,785,704,444

Short term borrowings

282,141,546

228,184,856

272,534,890

314,676,164

161,477,872

Long term borrowings

38,437,015

38,371,291

38,304,981

38,238,670

38,172,653

Accrued interest payable

2,460,829

2,844,715

1,643,666

1,827,605

1,105,830

Supplemental executive retirement plan

6,089,246

5,997,819

6,123,518

6,057,063

5,975,159

Other liabilities

32,559,241

7,788,981

9,989,481

10,553,800

7,882,869

Total liabilities

2,697,122,649

2,579,236,561

2,570,838,006

2,579,031,224

2,000,318,827

Stockholders' equity

Common stock

170,516

170,311

169,889

169,889

125,667

Additional paid-in capital

293,590,357

293,501,107

293,139,653

292,836,679

149,691,736

Retained earnings

89,084,561

82,628,356

74,167,389

67,601,752

66,573,919

Accumulated other comprehensive loss

(2,722,036

)

(5,529,240

)

(7,296,740

)

(6,263,883

)

(5,998,532

)

Total stockholders' equity

380,123,398

370,770,534

360,180,191

354,344,437

210,392,790

Total liabilities and stockholders' equity

$

3,077,246,047

$

2,950,007,095

$

2,931,018,197

$

2,933,375,661

$

2,210,711,617

Shares of basic common stock outstanding

17,051,569

17,031,052

16,988,883

16,988,883

12,566,696

(1) Financial information at December 31, 2018 has been derived from audited financial statements.

Old Line Bancshares, Inc. & Subsidiaries

Consolidated Statements of Income

Three Months Ended March 31,

Three Months Ended December 31,

Three Months Ended September 30,

Three Months Ended June 30,

Three Months Ended March 31,

2019

2018 (1)

2018

2018

2018

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Interest income

Loans, including fees

$

28,850,931

$

29,284,012

$

29,056,814

$

26,448,727

$

19,700,762

Investment securities and other

2,059,312

1,743,737

1,696,510

1,719,991

1,623,577

Total interest income

30,910,243

31,027,749

30,753,324

28,168,718

21,324,339

Interest expense

Deposits

5,616,515

5,067,752

4,098,787

3,146,235

2,306,733

Borrowed funds

1,982,713

1,891,413

1,768,532

1,714,250

1,334,831

Total interest expense

7,599,228

6,959,165

5,867,319

4,860,485

3,641,564

Net interest income

23,311,015

24,068,584

24,886,005

23,308,233

17,682,775

Provision for loan losses

414,175

613,672

307,870

532,257

394,896

Net interest income after provision for loan losses

22,896,840

23,454,912

24,578,135

22,775,976

17,287,879

Non-interest income

Service charges on deposit accounts

627,260

745,646

728,550

722,879

576,584

POS sponsorship program

600,061

641,063

711,577

673,502

-

Earnings on bank owned life insurance

494,180

531,604

520,785

461,056

292,936

Gains (losses) on disposal of assets

-

-

(1,100

)

-

14,366

Loss on write down of stock

-

-

(91,498

)

(60,998

)

-

Gain on sale of loans

-

556,358

-

-

-

Income on marketable loans

496,843

479,824

411,850

511,879

418,472

Other fees and commissions

544,435

1,238,049

525,171

879,733

492,663

Total non-interest income

2,762,779

4,192,544

2,805,335

3,188,051

1,795,021

Non-interest expense

Salaries & employee benefits

7,133,583

6,743,042

7,491,736

7,201,335

5,485,450

Occupancy & equipment

2,452,773

2,339,115

2,349,691

2,242,640

1,980,401

Data processing

727,183

699,769

659,926

702,182

609,639

Merger and integration

-

-

2,282,705

7,121,802

-

Core deposit amortization

657,824

662,718

663,685

540,737

312,313

(Gains) losses on sales of other real estate owned

-

(27,801

)

26,266

41,956

12,516

OREO expense

25,666

77,142

(99,957

)

27,995

184,994

Other operating

3,251,684

3,465,550

3,288,286

3,198,759

2,406,646

Total non-interest expense

14,248,713

13,959,535

16,662,338

21,077,406

10,991,959

Income before income taxes

11,410,906

13,687,921

10,721,132

4,886,621

8,090,941

Income tax expense

2,906,732

3,526,073

2,456,303

2,160,788

2,025,759

Net income available to common stockholders

$

8,504,174

$

10,161,848

$

8,264,829

$

2,725,833

$

6,065,182

Earnings per basic share

$

0.50

$

0.60

$

0.49

$

0.17

$

0.48

Earnings per diluted share

$

0.50

$

0.59

$

0.48

$

0.17

$

0.48

Adjusted per basic share (non-GAAP)

$

-

$

-

$

0.58

$

0.55

$

-

Adjusted per diluted share (non-GAAP)

$

-

$

-

$

0.57

$

0.54

$

-

Dividend per common share

$

0.12

$

0.10

$

0.10

$

0.10

$

0.08

Average number of basic shares

17,039,961

17,008,504

16,988,883

16,249,625

12,544,266

Average number of dilutive shares

17,170,507

17,181,820

17,187,837

16,464,580

12,743,282

Return on Average Assets

1.16

%

1.37

%

1.12

%

0.39

%

1.16

%

Return on Average Equity

8.99

%

10.70

%

8.89

%

3.14

%

11.36

%

Operating Efficiency (2)

54.65

%

49.39

%

60.17

%

79.55

%

56.43

%

(1) Financial information at December 31, 2018 has been derived from audited financial statements.

(2) Operating efficiency is derived by dividing non-interest expense by the total of net interest income and non-interest income.

Old Line Bancshares, Inc. & Subsidiaries

Quarterly Average Balances, Interest and Yields

3/31/2019

12/31/2018

9/30/2018

6/30/2018

3/31/2018

AverageBalance

Yield/Rate

AverageBalance

Yield/Rate

AverageBalance

Yield/Rate

AverageBalance

Yield/Rate

AverageBalance

Yield/Rate

Assets:

Int. Bearing Deposits

$

2,791,150

2.37

%

$

4,130,258

2.96

%

$

4,765,138

1.52

%

$

8,795,004

1.53

%

$

2,003,369

1.47

%

Investment Securities(2)

262,912,937

3.43

%

236,018,603

3.18

%

233,633,128

3.09

%

235,854,989

3.19

%

229,456,764

3.15

%

Loans

2,418,266,901

4.87

%

2,414,758,155

4.84

%

2,397,054,094

4.84

%

2,261,479,332

4.72

%

1,720,721,476

4.69

%

Allowance for Loan Losses

(7,593,472

)

(7,122,881

)

(6,885,911

)

(6,363,239

)

(5,973,556

)

Total Loans Net of allowance

2,410,673,429

4.89

%

2,407,635,274

4.86

%

2,390,168,183

4.85

%

2,255,116,093

4.74

%

1,714,747,920

4.70

%

Total interest-earning assets

2,676,377,516

4.74

%

2,647,784,135

4.70

%

2,628,566,449

4.69

%

2,499,766,086

4.58

%

1,946,208,053

4.52

%

Noninterest bearing cash

46,270,628

43,728,188

48,035,416

47,014,071

36,844,268

Goodwill and Intangibles

109,791,837

110,188,394

110,861,142

100,901,255

31,272,865

Premises and Equipment

44,403,507

42,902,372

43,626,501

43,592,991

41,088,624

Other Assets

99,169,559

101,812,816

103,995,121

98,152,802

69,837,318

Total Assets

$

2,976,013,047

$

2,946,415,905

$

2,935,084,629

$

2,789,427,205

$

2,125,251,128

Liabilities and Stockholders' Equity

Interest-bearing Deposits

$

1,741,184,120

1.31

%

$

1,726,574,227

1.16

%

$

1,658,060,302

0.98

%

$

1,522,249,880

0.83

%

$

1,200,931,980

0.78

%

Borrowed Funds

268,178,852

3.00

%

255,083,457

2.94

%

283,169,572

2.48

%

288,666,185

2.38

%

235,924,800

2.29

%

Total interest-bearing liabilities

2,009,362,972

1.53

%

1,981,657,684

1.39

%

1,941,229,874

1.20

%

1,810,916,065

1.08

%

1,436,856,780

1.03

%

Noninterest bearing deposits

565,081,492

572,704,465

601,558,786

615,780,315

457,850,993

2,574,444,464

2,554,362,149

2,542,788,660

2,426,696,380

1,894,707,773

Other Liabilities

17,825,648

15,264,196

23,355,099

13,536,574

13,931,983

Stockholder's Equity

383,742,935

376,789,560

368,940,870

349,194,251

216,611,372

Total Liabilities and Stockholder's Equity

$

2,976,013,047

$

2,946,415,905

$

2,935,084,629

$

2,789,427,205

$

2,125,251,128

Net interest spread

3.21

%

3.31

%

3.49

%

3.50

%

3.49

%

Net interest income and Net interest margin(1)

$

23,679,819

3.59

%

$

24,412,499

3.66

%

$

25,227,248

3.81

%

$

23,659,244

3.80

%

$

18,033,758

3.76

%

(1) Interest revenue is presented on a fully taxable equivalent (FTE) basis. The FTE basis adjusts for the tax favored status of these types of assets. Management believes providing this information on a FTE basis provides investors with a more accurate picture of our net interest spread and net interest income and we believe it to be the preferred industry measurement of these calculations.(2) Available for sale investment securities are presented at amortized cost.

The accretion of the fair value adjustments resulted in a positive impact in the yield on loans for the three months ended March 31, 2019 and 2018. Fair value accretion for the current quarter and prior four quarters are as follows:

3/31/2019

12/31/2018

9/30/2018

6/30/2018

3/31/2018

Fair Value Accretion Dollars

% Impact on Net Interest Margin

Fair Value Accretion Dollars

% Impact on Net Interest Margin

Fair Value Accretion Dollars

% Impact on Net Interest Margin

Fair Value Accretion Dollars

% Impact on Net Interest Margin

Fair Value Accretion Dollars

% Impact on Net Interest Margin

Commercial loans

$

44,430

0.01

%

$

140,822

0.02

%

$

113,378

0.02

%

$

209,819

0.03

%

$

47,705

0.01

%

Mortgage loans

678,636

0.10

504,905

0.08

620,664

0.09

752,461

0.12

78,188

0.02

Consumer loans

197,086

0.03

104,350

0.02

110,220

0.02

126,575

0.02

97,544

0.02

Interest bearing deposits

54,947

0.01

61,038

0.01

70,157

0.01

70,178

0.01

80,886

0.02

Total Fair Value Accretion

$

975,099

0.15

%

$

811,115

0.13

%

$

914,419

0.14

%

$

1,159,033

0.18

%

$

304,323

0.07

%

Below is a reconciliation of the fully tax equivalent adjustments and the GAAP basis information presented in this release:

3/31/2019

12/31/2018

9/30/2018

6/30/2018

3/31/2018

Net Interest Income

Yield

Net Interest Income

Yield

Net Interest Income

Yield

Net Interest Income

Yield

Net Interest Income

Yield

GAAP net interest income

$

23,311,015

3.53

%

$

24,068,584

3.61

%

$

24,886,006

3.76

%

$

23,308,232

3.74

%

$

17,682,775

3.68

%

Tax equivalent adjustment

Federal funds sold

103

0.00

124

0.00

92

0.00

80

0.00

36

0.00

Investment securities

169,305

0.03

157,634

0.02

159,520

0.02

161,340

0.03

160,911

0.04

Loans

199,396

0.03

186,157

0.03

181,630

0.03

189,592

0.03

190,036

0.04

Total tax equivalent adjustment

368,804

0.06

343,915

0.05

341,242

0.05

351,012

0.06

350,983

0.08

Tax equivalent interest yield

$

23,679,819

3.59

%

$

24,412,499

3.66

%

$

25,227,248

3.81

%

$

23,659,244

3.80

%

$

18,033,758

3.76

%

Old Line Bancshares, Inc. & Subsidiaries

Selected Loan Information

(Dollars in thousands)

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

March 31, 2018

Legacy Loans(1)

Period End Loan Balance

$

1,704,913

$

1,668,118

$

1,609,695

$

1,543,113

$

1,434,375

Deferred Costs

3,457

3,087

2,805

2,364

2,374

Accruing

1,703,328

1,667,179

1,608,808

1,542,371

1,433,907

Non-accrual

1,585

939

887

742

468

Accruing 30-89 days past due

6,454

7,988

6,352

4,565

4,587

Accruing 90 or more days past due

1,125

-

1,785

178

-

Allowance for loan losses

7,342

7,005

6,699

6,444

6,075

Other real estate owned

-

-

-

-

425

Net charge offs (recoveries)

(5

)

27

(1

)

(3

)

(2

)

Acquired Loans(2)

Period End Loan Balance

$

716,624

$

745,494

$

779,060

$

809,049

$

326,085

Accruing

712,932

741,777

775,438

807,241

324,787

Non-accrual(3)

3,692

3,718

3,622

1,808

1,298

Accruing 30-89 days past due

5,917

11,796

8,120

13,770

4,932

Accruing 90 or more days past due

151

243

733

361

330

Allowance for loan losses

466

466

281

260

182

Other real estate owned

883

883

1,469

2,358

1,375

Net charge offs (recoveries)

82

96

33

88

60

Allowance for loan losses as % of held for investment loans

0.32

%

0.31

%

0.29

%

0.29

%

0.36

%

Allowance for loan losses as % of legacy held for investment loans

0.46

%

0.45

%

0.42

%

0.43

%

0.42

%

Allowance for loan losses as % of acquired held for investment loans

0.06

%

0.06

%

0.04

%

0.03

%

0.06

%

Total non-performing loans as a % of held for investment loans

0.27

%

0.20

%

0.30

%

0.13

%

0.12

%

Total non-performing assets as a % of total assets

0.24

%

0.20

%

0.29

%

0.19

%

0.18

%

(1) Legacy loans represent total loans excluding loans acquired on April 1, 2011, May 10, 2013, December 4, 2015, July 28, 2017 and April 13, 2018.(2) Acquired loans represent all loans acquired on April 1, 2011 from Maryland Bank & Trust Company, N.A., on May 10, 2013 from The Washington Savings Bank, on December 4, 2015 from Regal Bank & Trust, on July 28, 2017 from DCB, and on April 13, 2018 from Bay Bancorp. We originally recorded these loans at fair value upon acquisition.(3) These loans are loans that are considered non-accrual because they are not paying in conformance with the original contractual agreement.

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